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A MONTHLY METER OF INDUSTRY TRENDS

May 01, 2003

STABILIZING MANHATTAN OFFICE MARKET

For the first time in months, the rate of decline has begun to level off in Manhattan, according to first-quarter 2003 numbers from Cushman & Wakefield. The trend is attributed to several factors: the fact that space in many buildings is being offered at attractive prices and business incentives available to tenants who locate Downtown.

Manhattan Office Market Statistical Breakdown

Manhattan Overall

1Q 2003

4Q 2002

1Q 2002

Vacancy Rate

12.3%

12.0%

10.4%

Rent/Sq. Ft.

$41.97

$42.96

$45.69

Downtown Manhattan

1Q 2003

4Q 2002

1Q 2002

Vacancy Rate

13.3%

13.2%

11.9%

Rent/Sq. Ft.

$38.24

$39.17

$40.55

Midtown South

1Q 2003

4Q 2002

1Q 2002

Vacancy Rate

13.9%

13.5%

12.1%

Rent/Sq. Ft.

$31.43

$33.23

$36.71

Midtown Manhattan

1Q 2003

4Q 2002

1Q 2002

Vacancy Rate

11.5%

11.1%

9.3%

Rent/Sq. Ft.

$47.30

$48.15

$51.68

Source: Cushman & Wakefield

THE BIG 3 IN MULTIFAMILY REITS

More than half of the equity market cap of the publicly traded multifamily REITs is made up by the top three companies: Equity Residential (24.70%), Archstone-Smith (15.09%) and Apartment Investment & Management Co. (12.97%).

Market Capitalization

Rank

Company

Ticker Symbol

Billions of Dollars

Percent of Subsector

1

Equity Residential Properties Trust

EQR

$6.52

24.70%

2

Archstone-Smith Trust

ASN

$3.98

15.09%

3

Apartment Investment & Management Co.

AIV

$3.42

12.97%

4

AvalonBay Communities Inc.

AVB

$2.51

9.53%

5

United Dominion Realty Trust Inc.

UDR

$1.71

6.49%

Source: National Association of Real Estate Investment Trusts

TOP INDUSTRIAL INVESTMENT MARKETS

Jacksonville and Houston are two of the best places to buy industrial properties in the country, offering median yields of 10.95% and 10.6% respectively, according to real estate brokerage Sperry Van Ness. The study is based on the transaction yields of multi-million dollar sales on an all-cash basis and the price per foot paid for buildings in 2002.

Top 5 Buyer's Markets

Rank

Region

Yield

Price per sq. ft.

1

Jacksonville, Fla.

10.95%

$33.91

2

Houston

10.6%

$29.28

3

Boston

10.43%

$53.33

4

Colorado Springs, Colo.

10.32%

$41.35

5

Columbus, Ohio

10.24%

$29.05

Source: Sperry Van Ness

NO BARGAIN FOR HOTEL FRANCHISEES

It's getting more expensive to own an economy-level hotel franchise. Research by HVS International reveals that the average franchise fee — measured as a percentage of room revenue — for economy brands (Days Inn, EconoLodge and Super 8) is now equal to that of mid-market brands (Best Western, Holiday Inn, Ramada). More than a decade ago, franchise fees for economy brands measured only 5.2% of room revenue, compared with mid-market fees of 5.7% and first-class fees of 9.6%.

RENT REPORT

Of the 105 million households in America, 36 million — or 34% — live in rented quarters, according to the 2000 Census. The average monthly rent for rented digs is $612.